8/30/2012

Now the Liberal-Dems in Britain are pushing for wealth tax

So much for Britain trying to attract a lot of wealthy people from France.  This tax increase is unlikely to occur during the current government because the Conservative party won't go along.  But it signals that it is likely that the tax rate on higher income individuals will go up under the next government.  Still higher future taxes means that someone thinking of bearing the cost of moving from France will think twice before moving to the UK.

. . . . Deputy Prime Minster Nick Clegg, leader of the Liberal-Democrat Party, has proposed a one-time tax on the wealth (rather than the incomes) of high-net-worth Britons. The details aren’t clear, but Clegg says the country is facing an economic war caused by a prolonged recession, and needs to tax the rich in order to avoid social unrest. . . . 
Chancellor George Osborn shot back, saying the plan would chase out the rich and make the odds of full recovery even worse.  Bernard Jenkin, the chair of the House of Commons' public administration committee, told the BBC that the tax could strangle the golden geese of Britain. “If the politics of envy made a country rich, we'd be very rich … Most rich people are contributing far more in tax than other people." . . . 
The debate in Britain mirrors the central debate in America’s presidential election: how much to tax the rich. Obama has called for raising their taxes. Romney calls for cutting them. 
Britain's tax distribution is less progressive than America's, with the top 1 percent paying about 24 percent of the total income taxes in the U.K. In the United States, the same group pays more than 35 percent. The top 10 percent in Britain pays 55 percent of income taxes, while in America the top 10 percent pays 59 percent. . . .
Here is figure from the BBC.  So why does Obama want to have a more progressive tax system than Europe?  The bottom 50% in the US don't pay any taxes.



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